How housing vouchers work, explained

Millions of Americans struggle to pay their rent each month. With rents rising and incomes stagnating, paying rent is the largest monthly expenditure for many families.

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Across the country, over 20 million households — more than four out of 10 renters — are rent-burdened, meaning they pay at least 30 percent of their income in rent. The share of rent-burdened households is even higher among low-income renters.

The government helps some of these low-income households pay their rent by providing vouchers through the Housing Choice Voucher Program, also known as Section 8.

The Housing Choice Voucher (HCV) Program is the largest federal program to subsidize low-income renters.

Across the country, nearly 2.2 million households receive housing vouchers to subsidize their rent. In DC, the voucher program provides assistance to 13,000 families.

There are two types of housing vouchers. Project-based vouchers are tied to a specific apartment and used by the family living there. When that family moves, the voucher stays with the unit, rather than moving with the family. Tenant-based vouchers, on the other hand, are given to a specific family. The family keeps the voucher when they move.

Because they are much more common, this explainer focuses on tenant-based vouchers in the District.

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The Housing Choice Voucher Program works by limiting the amount of their income that low-income families pay toward rent.

Voucher holders pay 30 percent of their income toward rent for an apartment on the private market. The federal government pays the rest of the rent directly to the landlord.

To be eligible to use a voucher, families typically must earn less than 50 percent of the median income in the place where they live (officially called Area Median Income, or AMI). In the Washington region, that’s about $50,000 for a family of four. However, most voucher holders in the region earn less than 30 percent AMI, or about $30,000.

After securing a voucher, families are required to find an apartment — or “lease up” — within sixty days. While they search for housing like anyone else in the city, their rent must fall within the Fair Market Rent (FMR) guidelines established by the Department of Housing and Urban Development (HUD). In the District, the fair market rent for a two-bedroom apartment is $1,623. Households using a voucher can rent any apartment at (or below) that threshold.

While voucher holders are permitted to search for apartments throughout the region, in practice, they are much more likely to find affordable housing in just a handful of neighborhoods. Few apartments in wealthy neighborhoods, like Georgetown, are inexpensive enough to meet HUD guidelines, while most apartments in low-income neighborhoods, like Deanwood, rent for below the market average.

While families mostly search for housing in the region, their vouchers are portable. If a family moves from Washington, DC to Mississippi, for example, they can take their voucher with them. Critically, housing vouchers do not expire. Households can continue to use their voucher as long as they remain eligible for the program and abide by program rules.

Local public housing authorities (PHAs) distribute housing vouchers through lotteries.

In DC, the District of Columbia Housing Authority (DCHA) runs the city’s voucher program. There are other public housing authorities in the region, including the Alexandria Redevelopment and Housing Authority and the Housing Authority of Prince George’s County, which also administer housing vouchers.

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With guidance from HUD, PHAs often prioritize certain types of households in distributing vouchers. For example, a PHA can give priority to homeless households, families living in extreme poverty, or those displaced by substandard housing conditions. In DC, the housing authority gives preference to homeless families above other households needing assistance.

To distribute the limited supply of vouchers, PHAs create waitlists for eligible families. This can be an open waitlist, where families join at any time, or a closed waitlist, where the housing authority opens the waitlist for limit periods of time. At the moment, the voucher waitlist in DC is closed.

Although new vouchers are rarely allocated by Congress, vouchers do become available when existing families leave the program. PHAs use the waitlist to select new voucher holders, either by holding a voucher lottery or simply selecting the next applicant on the list.

Housing voucher programs were created in the 1970s with the dual goals of de-concentrating poverty and empowering families to pick their own neighborhood.

Until the 1970s, nearly all federal housing assistance was provided through public housing developments. However, policymakers realized that these developments concentrated poor families in certain neighborhoods. They also contributed to racial segregation in cities.

The first voucher programs were proposed in 1970 and formalized through the Housing and Community Development Act of 1974. The Act amended Section 8 of the National Housing Act of 1937 to create the voucher program. As a result, the program became known as Section 8 vouchers. In 1998, Congress passed the Quality Housing and Work Responsibility Act, which formally changed the program name to the Housing Choice Voucher Program. Housing Choice vouchers and Section 8 vouchers refer to the same program, but Housing Choice vouchers are the preferred (and correct) terminology.

By giving households an opportunity to pick their own apartment, rather than living in public housing, policymakers expect vouchers to lead people to improved housing units in better neighborhoods. Voucher holders can move away from communities of concentrated poverty and live in high-quality housing.

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There is substantial evidence that when low-income families move into mixed-income neighborhoods, they do benefit. For example, people are often healthier and safer in these high opportunity neighborhoods. Children attend better schools and more regularly interact with middle-class neighbors.

However, critics argue that the benefits of the voucher program are overstated. Voucher holders typically cannot move to wealthy neighborhoods because the rents are too high. Many landlords refuse to accept housing vouchers. And even when they do move into a high-opportunity neighborhood, low-income households often find it difficult to stay there.

Perhaps most importantly, critics of the voucher programs note that housing assistance is not an entitlement. Unlike other government assistance programs, like Medicaid or TANF, most eligible households do not receive a voucher. In fact, only one-quarter of households who are eligible for a voucher actually receive one.

Brian McCabe is an assistant professor of sociology at Georgetown University. His recent book, No Place Like Home: Wealth, Community and the Politics of Homeownership (Oxford University Press, 2016), investigates the enhanced citizenship claims of homeownership. He lives in Shaw.